Written by Sri Murniati, Fellow of IDEAS
THE fiscal stimulus package announced by the government at the end of April has largely been implemented. The recent report from Laksana on May 12, for example, shows that RM10.6 billion out of the allocated RM11 billion for Bantuan Prihatin Nasional (BPN) has been disbursed.
The package has invited both praise and criticism. Some have acknowledged the need for the government’s fast reaction, but many have raised concerns over the lack of parliamentary oversight in the process.
While the unprecedented nature of the crisis does call for urgent action, we must also acknowledge that the announcement of the stimulus package is a clear indicator of weak parliamentary oversight on the budgeting process in Malaysia. The decision of the government to limit the upcoming parliamentary session to only one day further reinforces this notion.
The Open Budget Survey 2019 (OBS 2019), which was released on April 29, 2020, shows that Malaysia’s parliamentary oversight is indeed weak. Malaysia’s score on parliamentary oversight is only 19 out of 100.
The survey evaluates the quality of budget documents, and the levels of oversight and public participation in the budgeting process. Malaysia’s transparency score in OBS 2019 improved from 46 in 2017 to 47 in 2019. However, the level of oversight, especially parliamentary oversight and public participation, remains poor.
Malaysia’s parliamentary oversight on the budgeting process should not be as weak as it is. The Federal Constitution envisions the Parliament to provide check and balance mechanism to the use of financial resources by the executive.
Article 104 of the Federal Constitution states that “no money shall be withdrawn from the Consolidated Fund unless they are (a) charged to the Consolidated Fund (b) authorised to be issued by a Supply Act or (c) authorised to be issued under Article 102. Point (b) and (c) of this article requires parliamentary involvements.
Some of those who dismissed the importance of parliamentary oversight on the stimulus package used urgency as the excuse, ie parliamentary debate would delay the implementation of the package.
Some also argued that the government is allowed to use excess revenue and contingency funds without the Parliament’s approval and table supplementary supply bills later.
It is true that Article 101 of the Federal Constitution suggests that the government can spend excess revenue without parliamentary approval. Additionally, it does not clearly require the government to gain prior approval from the Parliament before spending supplementary supplies. The government is required to table either “sums required” or “sums spent” to the Parliament.
However, Article 103 on Contingency Fund urges the government to table a Supplementary Bill “as soon as possible” to replace the amount used.
Additionally, Article 102 of the Federal Constitution empowers the Parliament to authorise by law part of the year’s expenditure before the passing of the Supply Bill and Supplementary Supply Bill.
In other countries, such a law is known as the Imprest Bill/Act. The Imprest Bill is passed with limited debate and it is meant to grant permission to the government to spend before the Supply Bill or the Supplementary Bill is passed.
In New Zealand, for example, a fiscal stimulus package for Covid-19 was passed as an Imprest Supply Act in March 2020.
Interestingly, provision (2) of Article 102 suggests that the Parliament can authorise expenditure for the whole or part of the year “if owing… to circumstances of unusual urgency, it appears to the Parliament to be desirable to do so”.
Article 102 of the Federal Constitution clearly suggests that urgency is not an excuse for any government of this country to skip parliamentary consultation in passing an urgent fiscal stimulus package.
Now that the stimulus package has been implemented, the only course of action that this government should do to be consistent with the principle of check and balance in the Federal Constitution is to table a Supplementary Supply Bill as soon as possible. Ideally, the bill is tabled in this parliamentary session because the impact of this fiscal stimulus on the government finance has to be disclosed soon.
The stimulus package announcement and the one-day parliamentary sitting indicate the urgent need for Malaysia to strengthen the institution of Parliament.
In the context of parliamentary oversight over the budgeting process, MPs’ opportunities to scrutinise the allocation and use of government financial resources must be increased.
Currently, MPs can only scrutinise the allocation during the budget debate in October for about 20 days. But they can only debate policies not the nitty-gritty aspects of the allocation. They can table questions to ministers to check the implementation, but the opportunities are limited.
The Public Account Committee and the newly established Budget Select Committee provide selected MPs with opportunities to evaluate the implementation of the budget.
But these committees only have 21 MPs and they can only meet several times in a year. They can’t provide constant oversight on the allocation and implementation of the budget for specific ministries or sectors.
For that reason, the establishment of standing committees that deal with specific ministries or subjects is necessary.
Secondly, oversight on the revision of the budget needs to be strengthened. Supplementary Supply Bills should no longer be tabled after the budget year ends. They should be tabled during the budget year. And, except for certain circumstances which should be clearly defined, they should be tabled before the government uses the money.
Last but not least, we should explore the idea of having Imprest Supply/Supplementary Bills. After all, it seems to be consistent with Article 102 of the Federal Constitution.
The Imprest Supply Bill will require the government to involve the Parliament in budgetary allocation and will be useful during emergency situations when decisions about spending need to be made quickly. It will also give more time for the Parliament to deliberate on the budget and at the same time, ensure adequate resources are available for the government to run its operation before the Supply Bill is passed.
The Fiscal Responsibility Act that was planned to be tabled by 2021 is an opportunity to reform Malaysia’s budgeting process. I hope these points can be considered to be part of the reform.